EU's Banks Must Keep Shields Up

By

David Enrich

Updated Oct. 3, 2012 2:29 p.m. ET

LONDON—The European Banking Authority said the continent's banks must keep extra-thick capital cushions in place for now, likely dashing some lenders' hopes of buying back their own shares or doling out large dividends to shareholders in the near future.

The EBA, a pan-European Union supervisory body, said European banks will be required going forward to maintain ratios of so-called core Tier 1 capital of 9% of their risk-weighted assets, rather than just temporarily, and under so-called "stress-test" conditions....